How Shyp Is Shaking Up the Process of Mailing Packages

In shipping, there are two important miles: the last one—dominated by the U.S. Postal Service, FedEx and UPS—and the first one, the messy process through which customers drop off their packages.

For years, the first mile was handled via drop-off boxes, brick-and-mortar outlets and prescheduled pickups. Now there’s Shyp. The San Francisco-based company picks up unpackaged items (less than 50 pounds) directly from customers at their homes and businesses, boxes up the items at centralized packaging and shipping facilities and ships them through major carriers and the USPS.

Founder and CEO Kevin Gibbon explains that the model benefits everybody, since customers no longer have to worry about boxing up or dropping off their stuff, and shipping companies can pick up big loads without having to make hundreds of stops around a city.

“Really, it’s all about improving efficiencies,” Gibbon says, noting that though Shyp charges customers $5 per pickup, the company makes the bulk of its money on volume discounts from carriers. “The great thing about our model is that as we pick up more packages from more locations around the country, our discounts will increase.”

Shyp’s approach hinges on two key resources: squadrons of freelance bike couriers and drivers paid by the hour (dubbed “Shyp Heroes”), and a proprietary iOS and Android app that connects them with customers. Using the Shyp app, customers take a picture of their item and request a pickup; Shyp’s system finds the closest courier through his or her smartphone, pings the rider or driver to see if the item can be managed, and keeps asking until the assignment is accepted.

When someone agrees to pick up an item, Shyp provides the customer with an estimated time of arrival and creates a virtual map for tracking the courier’s progress. Customers can track their shipment all the way through the delivery process.

“It’s all about opening communication with the customer,” says Gibbon, who previously founded ShopAround, a now-defunct app that helped customers gauge prices on products from nearby retailers.

Once an item is delivered to a Shyp facility, the company’s money-saving technology comes into play. Workers weigh and measure each item, then a specialized machine takes raw cardboard and produces a box that fits the item to within one-tenth of an inch. According to Gibbon, this process reduces the need for excess bubble wrap and other space fillers—a big deal as shipping companies change their pricing models from weight- to volume-based. “When you’re working with economies of scale like we do, these savings add up,” he says.

Armed with a $10 million Series A round led by SherpaVentures, Shyp expanded to New York City and Miami last fall. Customers seem thrilled. Leigh Goldstein, the former director of shipping for eBay and current COO of Feastly, a San Francisco marketplace for shared meals, raves about Shyp’s ability to improve efficiencies and notes that the company ultimately might be able to revolutionize the last mile—delivery—as well.

“The key with the last mile is that it takes some sort of partnering, either with e-commerce companies or shipping companies, to really make a difference,” he says. “UPS is driving around in brown trucks, but maybe a small army of people on bikes is a better way.”

Matt Villano

Matt Villano is a freelance writer and editor in Healdsburg, Calif. He is a regular contributor to Entrepreneur, and has covered startups and entrepreneurship for The New York Times, TIME and CIO. He also covers a variety of other topics, i...